First Albany initiated coverage on Photon Dynamics (PHTN ) with buy.
Analyst Auguste Richard says Photon Dynamics makes products that detect and repair defects in flat-display panels. The products are used to help manufacture Active Matrix Liquid Crystal Display (AMLCD) units, where penetration is growing due to flat display panels in the television and desktop PC markets.
He says Photon is one of only a few U.S.-based companies that is leveraged to the growth of the AMLCD market.
Richard says process control provides manufacturers with a high return on investment, and it should grow at least as fast as the AMLCD equipment market. He sees 70 cents fiscal 2004 (Sep.) earnings per share, and $1.50 in fiscal 2005, with the potential for upside as penetration of the TV market accelerates over the next couple of years. He set a $45 target.